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Give Us a Call 24/7 to Speak to a Loan Specialist: (866) 526-0238

Tattoo Shop Loans

Financing For Tattoo Shops

Let’s talk about the biggest demographic that businesses need to be marketing too – you guessed right, it’s millennials. When it comes to the tattoo industry and body modifications, millennials make up over half of the tattoo industry’s customer base. This industry is definitely proof of the large generational gap, since only 10% of people over 40 years old will even admit to having a tattoo! While older generations tend to roll their eyes at the group of millennials walking into the microbrewery all tatted up, it has become a defining mark of the millennial generation. According to Keenan Beasley, a millennial advertising and marketing agency co-founder, “To my generation, tattoos aren’t a mode of rebellion – they’re a mode of expression. And apparently we have a lot to say, seeing as millennials have nearly twice as many tattoos as Baby Boomers. Our differences include how we look, how we dress, the music we listen to, the books and blogs we read. Individuality is what binds our generation together.” There is not simply a “type” of person that has a tattoo anymore – it’s all of us millennials and gen x’ers.

Tattoo Industry Trends

Since millennials are dominating the United States now, the tattoo and piercing community is skyrocketing, with numbers only continuing to soar. While this industry is often described as a popular trend, that statements been made for years and years now, so it looks like this industry isn’t even close to hitting its peak! In the past five years, the tattoo industry has become less taboo, leading to an incredibly stimulating industry revenue and is only expected to continue on that path. A study into United States Tattoo Parlors, Tattoo Removal and Body Piercing Services, published in November 2015, shows quite the booming industry:

  • There are over 20,000 tattoo parlors.
  • Tattoo parlors’ average revenue is around $1.35 billion.
  • Body piercing, especially when offered at a tattoo parlor, brought in around $966 million in 2015.
  • The tattoo removal market brought in $694 million in 2015.
  • The tattoo industry grew 9.5% from 2014 to 2015, and is only continuing into the next few years.
  • A typical tattoo artist earns around $50,000 a year, and the average revenue for a tattoo studio is estimated to be around $241,000.
  • Body piercing, when offered at tattoo shops, contributes to around 25% to 30% of total revenues for businesses.

These numbers are only expected to continue to grow with the influx of people dying for body art. Industry projections show that there is expected to be an annualized rate of 9.8% to $722.4 million, once again, thanks to the tattoo industry’s key millennial demographic. In conjunction with tattoo shops, the most successful tattoo parlors often offer additional body modification services, such as piercings and even tattoo removal services. This opens up a whole new door of profitability when offering additional services. Tattoo businesses have also started to offer more diverse products and tattoo designs, allowing many tattoo businesses to reach a much wider demographic. These include 3D tattoos, watercolor tattoos, and invisible ink tattoos. It’s pretty amazing the variety of options offered to ink up your body today; this all contributes to the quickly growing market for tattoo businesses.

The tattoo and body modification industry is booming with continued expected growth, especially because it is almost impossible for a major company to come along and monopolize the tattoo industry. There are only small, local tattoo shops, and most tattoo parlors do not even open more than one location. Multiple locations and tattoo parlor chains tend to deter people who are hoping for quality body art work. Even without multiple locations, tattoo shops typically thrive, but this does not mean there are not ups and downs to running a business. Tattoo businesses in particular are an incredibly expensive business, even after the business has been established for a few years. There is always a need for financing options when running a business like this.

Why Would a Tattoo Shop Need Financing?

  • Inventory: Tattoo shops often have an incredibly expensive inventory, because quality inks, ink guns, jewelry, sterilization tools, and so forth can make or break a tattoo parlor. When replacing equipment or purchasing more for peak season, having options to different types of loans is essential in this industry.
  • Renovation and upgrades: Renovation and staying “relevant” is incredibly important in a popular, trendy business. Keeping your lobby up-to-date and filled with images of the different styles of artwork that your business offers is vital to keeping the customers coming in. Loan options can help when there is not extra funds around to do little things like this.
  • Expansion financing: Business expansion of your tattoo shop into a more diverse business can really help a local business thrive in this industry. Offering services such as tattoo removal or body piercings are something that every tattoo business should keep in mind, as the best tattoo shops in the industry often provide these services.
  • Merchandising: Merchandise is a particularly useful marketing and business tool in the tattoo industry. Just look at Ed Hardy who has made his business so incredibly successful thanks to his merchandise!
  • Marketing and advertising: Marketing is the number one tool a small local business needs to utilize, especially for the tattoo and body modification industry. While there are always cheap options to market your tattoo company through social media and whatnot, allocating funds to better marketing tools is always a great way to bring in more customers.
  • Compliance: Staying up to date on all regulations, certifications, and licenses for the tattoo industry is essential; you obviously cannot run your business without the proper licenses! Renewal fees and new and/or changing regulations can be sudden expenses that some owners could not see coming. Having access to different types of financing options can help during these times.
  • Payroll and hiring employees: Payroll and other miscellaneous taxes and fees can be difficult to cover when business gets slow, so being aware of different loan options can help!

Tattoo Store Loan Comparison

Types Rates Terms Funding
Bank 5-10% 3-7 years 14-30 days
SBA 6-10% 3-7 years 10-30 days
Line of Credit 5-15% 1 – 3 years 7-30 days
Alternative 6-25% 1-5 years 5-7 days
 Cash Advance 1.16-1.55 3-24 months 1-3 days

Bank Loans For Tattoo Shops

For tattoo parlors looking for the most affordable business financing, a term loan and lines-of-credit are most definitely the best options. A tattoo bank loan has rates starting in the low single digits, with terms ranging up to 10 years. To get a tattoo shop loan from a bank, a borrower must have good credit and excellent revenue.

Documents needed for a tattoo shop bank loan include:

  • Tattoo shop tax returns (3 years)
  • Tattoo shop financials
  • Tattoo shop list of debt
  • Tattoo shop owner tax returns
  • Personal financial statement

SBA Tattoo Shop Financing

SBA loans for tattoo parlors are a type of business financing where a traditional lender provides tattoo shop funding and the Small Business Administration agrees to cover most of the lender’s losses if the tattoo shop defaults on their loan. Tattoo shop SBA loans have bank-rates and terms up to 25 years.

Documents needed for tattoo shop SBA loans include:

  • Tattoo shop tax returns 
  • Tattoo shop financial statements
  • Tattoo shop schedule of liabilities
  • Tattoo shop owner’s tax returns)
  • Personal financial statement

Alternative Tattoo Shop Loans

For tattoo shops that are unable to secure traditional bank business loans or SBA financing, an option is to get an alternative business loan. Mid prime alternative financing are true amortizing loans that have rates starting is the high single digits and terms ranging between 2-5 years. Alternative lenders don’t require the same credit and documentation requirements as traditional financing, making this a good option for tattoo parlors looking for fast financing.

Documents needed for alternative lending:

  • Tattoo shop tax returns
  • Tattoo shop income statements
  • Tattoo shop balance sheets
  • Schedule of liabilities (list of all business debt)
  • Personal tax returns (1 year)

Tattoo Shop Asset Based Lending

Asset based loans are a way for tattoo shops to use their personal or commercial real estate’s equity to obtain business financing. By using the real estate’s equity, a ABL lender can provide a 1st, 2nd or 3rd position on the the real estate at up to 50% of the real estate’s value.

Documents needed for tattoo shop asset based lending:

  • Application
  • Bank statements (proof of cash flow)
  • List of collateral
  • Appraisal

Tattoo Shop Cash Advance

Merchant cash advances and ACH loans are the sale of a tattoo shop’s bank account or credit card deposits in return for upfront funding. These types of loans are great for tattoo shops with bad credit or are high-risk.

Documents needed for a merchant or business cash advance:

  • Application
  • Bank statements and/or credit card statements

Get a Tattoo Shop Loan

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